Dismissed

R.Sreekumar v. the Customs Excise & Service Tax Appellate Tribunal

Kerala HC22 Jan 2014Cus.Appeal/1/2014

Case brief

AI extract

What is this about?

This Customs Appeal challenged a penalty order regarding allegations of abetting misdeclaration of import goods. The Court upheld the order, finding the appellant's retraction was an afterthought and the Tribunal's reduced penalty constituted substantial justice, dismissing the appeal.

What did the court decide?

Customs Appeal dismissed; penalty order of ₹20,000 confirmed; no interference with Tribunal's decision.

R.Sreekumar Vs the Customs Excise & Service Tax Appellate Tribunal — Corruption | Kerala HC (2014)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR

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& THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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WEDNESDAY, THE 22ND DAY OF JANUARY 2014/2ND MAGHA, 1935

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Cus.Appeal.No. 1 of 2014 ()

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AGAINST THE ORDER/JUDGMENT IN CA 242/2007 of CUSTOMS,EXCISE&SERVICE TAX APP.TRIBUNAL,BANGALORE DATED 20-06-2013

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APPELLANT(S):

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R.SREEKUMAR S/O.RAVEENDRANATHAN KARTHA, PRASEEDA OPPOSITE RAMAVARMA WOMEN'S HOSTEL, TD ROAD ERNAKULAM PRESENTLY RESIDING AT 4D, RAMALAYAM-11 RAMAVARMA LANE, OPPOSITE KRISHNA HOSPITAL, ERNAKULAM COCHIN 682 011

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BY ADV. SRI.GEORGE JACOB (JOSE)

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RESPONDENT(S):

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1. THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL BANGALORE 560 009.

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2. THE COMMISSIONER OF CUSTOMS, CUSTOM HOUSE, COCHIN 682 009.

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BY ADV. SRI.TOJAN J.VATHIKULAM,SC,C.B. EXCISE BY SRI.THOMAS MATHEW NELLIMOOTTIL,SC,CB EX

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THIS CUSTOMS APPEAL HAVING COME UP FOR ADMISSION ON 22-01-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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MANJULA CHELLUR, C.J & A.M.SHAFFIQUE, J.

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Customs Appeal.No. 1 of 2014

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Dated this the 22^nd January, 2014 JUDGMENT

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Manjula Chellur, C.J.

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Heard learned counsel for the appellant on admission.

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The brief facts that led to filing of the present Writ Petition are as under:

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Appellant was the manager of a Customs House Agency by name Total Shipping India (P) Ltd. The controversy pertains to one consignment of consumer goods and household items imported from UAE by one Kunhimohammed through importer M/s.Pride International Trading Company. The entire issue is based on the allegation that there was misdeclaration of goods covered under Bill of Entry No.151584 dated 25.11.2004 said to be in the container. Customs seal on the container was found broken. Further when container was examined, excess goods worth ₹56,33,360/- as against declaration of value of goods at ₹1,00,000/- were found, hence investigation was initiated which culminated into the present penalty order which is besides

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Customs.Appeal.No.1/14 2

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confiscation of the goods. Involvement of the present appellant as a Manager of Customs House agency firm is, the department found him guilty of abetting the misdeclaration of goods in the container by consignee, therefore, a show cause notice was issued to him which culminated into the penalty order. Paragraph 49(v) of Annexure-I order of the Commissioner of Customs is relevant, which reads as under:

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“49(v) Sri.R.Sreekumar, the authorised signatory of the CHA M/s.Total Shipping (India) Pvt. Ltd., who actively colluded in the conspiracy and abetted in the commission of the offence for a consideration of ₹ 10,000/- from Sri.Kunhi Mohammed, but subtly kept away from the scene of occurrence was called upon to show cause as to why penalty should not be imposed on him under section 112(a) & (b)/114A of the Customs Act 1962.”

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This was challenged before the Appellate Tribunal. Though the Tribunal confirmed imposition of penalty, having regard to the other circumstances, reduced the penalty of ₹2,00,000/- to 20,000/- taking a very lenient view. According to₹ learned counsel representing the appellant, he had not filed import application for movement of container from port to CFS paying extra charges and he was not given a fair opportunity of

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cross-examining the witnesses concerned and further, there was no proper consideration of statement of retraction made by him.

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Tribunal, after referring to the submissions made by the party, narrated reasoning of the Commissioner in the impugned order relevant for the purpose of disposal of the appeal with reference to actual involvement of the appellant in handling goods as agent of the customs house agency firm and then proceeded to opine that the statement given by the appellant coupled with other facts clearly indicated that there was meddling with the container and there was intentional information as declaration given to mislead the department concealing actual valuation of the goods contained in the consignment and involvement of the appellant was for a consideration of 10,000/-,₹ therefore, he was found guilty of the allegation, rejecting all the objections and defence raised by the appellant.

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We have gone through the order of the Commissioner as well as the Tribunal. The statement of the appellant was recorded either on 30.11.2004 or 1.12.2004 as per the submissions of learned counsel for the appellant. He was found involved in the entire episode by abetting the act of pilferage. Bail application of the appellant came to be filed subsequent to 1.12.2004 and

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incidentally he was granted bail on 4.12.2004. Prior to this, he had given statement under Section 108 of the Customs Act, which seems to be the sole basis for imposing penalty. The show cause notice is dated 20.11.2005 to which reply was sent on 17.12.2005. What happened after 30.11.2004 till the reply given on 17.12.2005 has to be looked into in order to understand whether there was compulsion, persuasion or coercion in giving a statement under Section 108 of the Act as contended by the appellant. The earliest opportunity to retract the statement was the time when he was produced before the Magistrate concerned, before whom he could have stated that his statement was recorded either under coercion, threat or exertion. But no such complaint whatsoever came to be made. He was released on bail on 4.12.2004 and the reply notice is dated 17.12.2005 refuting all the allegations made in the show cause notice including retraction of his statement under Section 108 of the Act. Apparently, till then there seems to be no retraction of the statement by the appellant. Though learned counsel for the appellant tries to bring on record a statement dated 8.4.2005 said to have been sent to the department denying voluntary statement under Section 108 of the Act, we find no material indicating in fact this statement or

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letter dated 8.4.2005 was sent to the department. Even otherwise, after his release on 4.12.2004 he had ample time till 8.4.2005 to retract his statement under Section 108 of the Act. He did not do so. Much later, even if we consider 8.4.2005 reply, i.e., almost five months after his statement he retracted from what he has stated before the department. In the absence of acknowledging the statement dated 8.4.2005 by the department, the only retraction is by way of reply dated 17.12.2005. Therefore, Commissioner was justified in opining that retraction was an afterthought and he did not make use of the earliest opportunity to do so when he was produced before the Magistrate concerned. Learned counsel tried to impress upon us that out of fear, he might not have declared so before the Magistrate. Even if it is so, a prudent and reasonable thinking person would not wait till April, 2005 to do so. If his illness was the cause for delay, it appears, he was hospitalised only for two weeks after release on bail. None of the arguments justifies the delay so far as retraction of statement.

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Then coming to the proceedings, according to learned counsel, no fair opportunity of being heard was given to him. On perusal of Section 124 of the Act, the procedure for confiscation

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of goods and also imposition of penalty, it only indicates a summary proceedings and no detailed enquiry of any nature. Issuance of show cause notice and reply dated 17.12.2005 are admitted facts. Whatever he wanted to say as defence, was indicated in the reply dated 17.12.2005 and the same was analysed with reference to the facts found on record. Therefore, there is no denial of any opportunity as contended by learned counsel for the appellant.

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Then coming to the order of the Tribunal, substantial justice is extended by reducing the fine of 2,00,000/- to ₹ ₹ 20,000/- having regard to the involvement of the appellant in the above episode. We are of the opinion, whatever leniency he deserves, is already meted out to him at the hands of the Tribunal. Accordingly, we decline to interfere. Consequently, the Appeal is dismissed.

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MANJULA CHELLUR, CHIEF JUSTICE

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A.M.SHAFFIQUE, JUDGE

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vgs23.1.14

R.Sreekumar v. the Customs Excise & Service Tax Appellate Tribunal

Case brief

What is this about?

What did the court decide?

R.Sreekumar v. the Customs Excise & Service Tax Appellate Tribunal

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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Parties & counsel

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